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Spending review puts brunt of cuts on five departments, says thinktank Spending review puts brunt of cuts on five departments, says thinktank
(about 1 hour later)
The police, courts, education, local government and business are facing spending cuts of up to 30% next week as five Whitehall departments bear the brunt of George Osborne’s attempt to put Britain’s public finances back in the black, according to an independent thinktank.The police, courts, education, local government and business are facing spending cuts of up to 30% next week as five Whitehall departments bear the brunt of George Osborne’s attempt to put Britain’s public finances back in the black, according to an independent thinktank.
The ringfencing of key areas of spending, such as the NHS, coupled with agreements already struck between the chancellor and some of his cabinet colleagues, has left five big areas of spending under threat, says the Resolution Foundation.The ringfencing of key areas of spending, such as the NHS, coupled with agreements already struck between the chancellor and some of his cabinet colleagues, has left five big areas of spending under threat, says the Resolution Foundation.
Related: Shock UK deficit figures dent George Osborne's economic planRelated: Shock UK deficit figures dent George Osborne's economic plan
A paper by Torsten Bell and Adam Corlett calculates that the Home Office, the Ministry of Justice, the Department for Business Innovation and Skills, local government, and non-protected education spending will have to deliver £18bn worth of cuts between them if the Treasury was to meet its spending targets.A paper by Torsten Bell and Adam Corlett calculates that the Home Office, the Ministry of Justice, the Department for Business Innovation and Skills, local government, and non-protected education spending will have to deliver £18bn worth of cuts between them if the Treasury was to meet its spending targets.
Some ministers, including the home secretary, Theresa May, have been battling hard to limit the cuts to their budgets, arguing that the current Treasury demands are excessive given the deep cuts already made in the last parliament.Some ministers, including the home secretary, Theresa May, have been battling hard to limit the cuts to their budgets, arguing that the current Treasury demands are excessive given the deep cuts already made in the last parliament.
Senior police officers had already been lobbying against steep reductions in the Home Office budget even before the terrorist attacks in Paris made spending on law and order an even more politically sensitive topic.Senior police officers had already been lobbying against steep reductions in the Home Office budget even before the terrorist attacks in Paris made spending on law and order an even more politically sensitive topic.
The Resolution Foundation analysis suggests that the chancellor is faced with a dilemma following the commitment to protect spending on the NHS, international development, defence and school spending for pupils aged five to 16 for a second parliament, and in the wake of settlements reached in recent weeks with seven smaller Whitehall departments including transport, work and pensions, and energy and climate change.The Resolution Foundation analysis suggests that the chancellor is faced with a dilemma following the commitment to protect spending on the NHS, international development, defence and school spending for pupils aged five to 16 for a second parliament, and in the wake of settlements reached in recent weeks with seven smaller Whitehall departments including transport, work and pensions, and energy and climate change.
The paper says the alternative to swingeing cuts for the unprotected departments would be for the chancellor to soften his austerity plans, something that would be possible if the Treasury abandons the idea of a £10bn budget surplus in the final year of the current parliament.The paper says the alternative to swingeing cuts for the unprotected departments would be for the chancellor to soften his austerity plans, something that would be possible if the Treasury abandons the idea of a £10bn budget surplus in the final year of the current parliament.
As Osborne makes his final preparations for Wednesday’s spending review and autumn statement, his problems have been underlined by the unexpected weakness in the public finances, with the deficit for the first seven months of the 2015-16 financial year coming down less rapidly than expected.As Osborne makes his final preparations for Wednesday’s spending review and autumn statement, his problems have been underlined by the unexpected weakness in the public finances, with the deficit for the first seven months of the 2015-16 financial year coming down less rapidly than expected.
“Given what we now know about all the other departments these ‘big losers’ could face average cuts of 30%, if the scale of spending cuts outlined by the Treasury is to be delivered”, the Resolution Foundation said. “It’s perhaps not a surprise then that negotiations with these departments are taking longer to finalise.”“Given what we now know about all the other departments these ‘big losers’ could face average cuts of 30%, if the scale of spending cuts outlined by the Treasury is to be delivered”, the Resolution Foundation said. “It’s perhaps not a surprise then that negotiations with these departments are taking longer to finalise.”
The paper says the departments that have already agreed their budgets have accepted average cuts of 24%. Although the Resolution Foundation said these were “tough settlements” given the “significant” cuts in the last parliament, it said that these departments might consider themselves “lucky” in the light of the savings being demanded elsewhere.The paper says the departments that have already agreed their budgets have accepted average cuts of 24%. Although the Resolution Foundation said these were “tough settlements” given the “significant” cuts in the last parliament, it said that these departments might consider themselves “lucky” in the light of the savings being demanded elsewhere.
“It is worth pausing on the inclusion of education in this list. It makes it on because its protection only applies to the five to 16 schools spending, leaving sixth forms, the care system, teacher training, under 5s and even some elements of five-16 schooling like the pupil premium and free school meals. Indeed, in the unlikely world in which all the ‘big losers’ were to undergo the same proportionate cuts, education would actually record the biggest cash cut of all at around £4bn. “It is worth pausing on the inclusion of education in this list. It makes it on because its protection only applies to the five-to-16 schools spending, leaving sixth forms, the care system, teacher training, under 5s and even some elements of five-to-16 schooling like the pupil premium and free school meals. Indeed, in the unlikely world in which all the ‘big losers’ were to undergo the same proportionate cuts, education would actually record the biggest cash cut of all at around £4bn.
“So the conclusion of the various pre-announced policies is that it’s these five departments that we should focus on next Wednesday. Either they will have received an average cut of around 30%, or the overall pace of cuts will have been watered down.”“So the conclusion of the various pre-announced policies is that it’s these five departments that we should focus on next Wednesday. Either they will have received an average cut of around 30%, or the overall pace of cuts will have been watered down.”
Bell, an adviser to Ed Miliband during the last parliament, is director of the Resolution Foundation, which is chaired by the former Conservative cabinet minister, David Willetts.Bell, an adviser to Ed Miliband during the last parliament, is director of the Resolution Foundation, which is chaired by the former Conservative cabinet minister, David Willetts.